Watching for a trend reversal

Yesterday the Value Line Composite Index closed above it's 75 day moving average. The 75 dma of the Value Line is one of four trend indicators in my timing model. If this index can stay above this level today it will raise my model reading from a +1 to a +2, suggesting a 90% allocation to stocks. The S&P 500 is still below it's 75 day moving average.

I point this out because my model is set up to defer to it's trend indicators as bullish (extreme pessimism) sentiment readings begin to lose strength/relevance. The trend indicators will either kick in or the model will begin to turn bearish. My guess is we will see some consolidation near term, but we will head to higher levels over the the next month or so. I also believe we are still in a bear market but my model has an intermediate term orientation, so it is possible to go heavily long.

Trend indicators are very sensitive and whipsaws should be expected. I usually deal with junctures like this by shifting some assets to a double long fund (such as ULPIX) instead of opening a new position in a sector or country ETF. By holding small positions in double long/short funds I can adjust to small changes to my model without generating a bunch of trades.

Here's an under the hood look at my TAA portfolio as of yesterday's close: